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retroworks writes "Bloomberg News makes the case that when the federal government offers tuition assistance, students apply to more expensive colleges, giving the institutions an incentive to raise tuition and a disincentive to lower it. (The Wall Street Journal has a similar article, but it's paywalled.) This reminds me of the debate over President Reagan's cuts to the Pell Grant program in the 1980s. MIT's Campus Paper 'The Tech' quoted the MIT administration as saying it had 'no idea what really will occur' when Reagan's proposal to cut Pell came to Washington. So the question is, 25 years later, do we know now? Did cuts to federal tuition assistance hurt the education of the lower income students? Did increases to Pell grants create more opportunity? Or is federal money the milkshake, and students are just the straw?"

If I am a school and I have learned that students can borrow $60,000 a year from the government, then I am sure as hell I will raise my prices to get htat "free money".

No, not at all. If you had a full campus while charging $5K/yr, you'll raise your tuition to $65K a year, because you'll collect the "free" $60K plus your campus full of students obviously can afford $5K/yr.

Not one extra person will attend (duh, the out of pocket cost remains $5K) and not one extra person will not attend (free money for all !!!)

There are plenty of students who won't borrow 60k just because they can. They might in fact shop around for a cheaper institution, so they don't have to borrow money. Not everyone is eager to go into massive debt.

Pell Grants have gone down in recent decades [quickanded.com] (i.e. increased at less than the rate of general inflation - to say nothing of the much higher rate of inflation in education costs) while loan programs have exploded.

Unfortunately, most students get enough to cover tuition at the most expensive school they can get into, the cost of eating out every meal, rent an apartment in a trendy & safe place, and enough weed to last the full 6 years it will take them to graduate. Fine by me, I worked my way through to come out with 2k in debt and a good paying job, so that after interest I will have something like a 20 year head start on most of them. It sucked majorly feeling weak and hungry all the time for a few years, but I

I also busted my ass and lived in squalor to graduate almost debt free. Honestly, I wish I'd signed on the dotted line and lived on loans to graduate three years earlier than I did. At this point of my life, it would have been worth it. Instead I missed the best years of the dot-com era, got reamed in the housing bust, and now I'm starting a family in my late 30's.

Loans are arms and the lenders are arms dealers. The people who graduated ahead of you bought the bullets and effectively shot you out of the economy. They effectively pit us against eachother when competing for any big ticket item: house, car, education, etc.

Just as in war, a combatant sometimes wins; but arms dealers always win.

No, that part time job at the book store will not cover your tuition either. You would be fucked if you tried to do it over and this is why the younger people are angry as the older generation does not see the inflation with the economy after graduation picture. The world has changed

Its not just inflation. At every turn (looking at the California State college system because its one of the largest, best, and most endangered) the Colleges of California are in operational freefall from the Top UCs to the community colleges. With the slow motion disaster that is our state government and state sources of school funding drying faster than a spit puddle in Death Valley at high noon, the cost of tuitions have literally SKYROCKETED, Administrators, insensitive to the disaster have voted themselves huge pay raises while cutting courses and eliminating teaching jobs like there's no future. With every turn the State's education system tries to run schools on less resource, and squeezes the students ever harder, applying tuition hikes on top of tuition hikes. A growing percentage of students are being priced out of their education in mid school attendance. A quality higher education in California will soon be well beyond the reach of any normal middle class family, and require a level of saving and scrimping starting at a child's birth that most families are neither equipt nor interested in making.

We need a system that maintains high standards and demands that students are serious about pursuing that degree, but once the student has demonstrated the desire and the capacity, we need to provide all the resources we can to ensure that student receives the education they desire. Every measure of economic health tells us that well educated professionals are a boon to the economy, leaders in their various communities, and return the investment in their success dozens of times over. With the accelerating technological challenges facing our society, we can't afford not to have a well educated, disciplined and intellectually proficient society of clear and cogent thinkers. The alternative is to hope we can HB-1 our way through the future, and I hate to be the one to tell you, but a growing number of those children are going back home with their knowledge, business experience and professional acumen. We've virtually bankrupted our economy, let's not do the same with our children's future.

Oh yeah, and the damage you did to your brain and body are a model upon which to build a future for our children (and trust me, you did damage, you may not know it now, but when the osteoporosis troll come a knocking, please don't be surprised, he's been to the house of quite a few of my friends who did exactly what you did in the young adult years when good nutrition ensures a long healthy life.

Which isn't to say there aren't a bunch of lazy, sex crazed coed, studying classes that will make little or no contribution to their future and who's nutrition even with money sucks beyond reconciling. Its just a certainty that if you can't afford good healthy food, that sooner or later you'll pay with your health.

Personally I like the idea of a society that supports young people in choosing between college and useful, vital trades that society needs and upon which a young man or woman can build a healthy future. The education cost would be dramatically less, preserve vital skills in our society, and normalize the price of plumbers and electricians and car mechanics, oh my. That would leave the justifiable college bound a much larger pie in which to cut, and more resources to support them in becoming future engineers, scientists, teachers and scum sucking lawyers and corporate capitalists (the scum sucking is obligatory, but seem harder every day to separate from these last two groups.)

It really is a no-brainer, Fail to support the students of today and the future will suck even more than it does now. There are few better investments.

you know, if you had spent 25 bucks a week more on food (probably more than you would need to) you would have accrued 5K or so more debt over 4 years. While that seems like a lot, the benefits, both physically and mentally, of not being malnourished while you were in school

Most important life skill at high school graduation is knowing how to cook. Not how to read directions on a frozen pizza wrapper, but really cook. Aside from the obvious health benefits its incredibly freaking cheap and tasty food simply puts you in a better mood, not to mention how the ladies enjoyed my home cooked meals. Try to survive on hot pockets and McD value meals and Raman and you won't live well or long.

Actually, no, the restaurant pays about 35% for the ingredients. Meat is only slightly more expensive retail, still about 50% cheaper. If the restuarant seems cheaper you probably are comparing a low quality steak in the restaurant to a high quality one in the store.

I worked briefly at a restaurant that had the best cream of mushroom soup I've ever tasted. So I made it at home. Making a few bowls cost me like $20, mostly in cream. I asked the chef how they charged so little and he said the main thing was they got cream for like $4/gallon. I was paying like $4/pint or so at the store.

Cheap? If I want to cook a steak, it costs me more to buy the raw steak and sides than to just go out and buy one at a restaurant. This is especially true if you're cooking for yourself. Your options there are to eat the same meal for a week straight (bleh, boring), freeze leftovers after cooking (which never tastes good after), or only make things that have no spoiling ingredients (so no milk, cream, etc). Oh and you're going to throw out half your excess ingredients, because grocery stores don't really se

There are plenty of students who won't borrow 60k just because they can.

They don't make that decision. That decision is made for them by the school when they set their tuition rate.

Its like mistakenly thinking individual home buyers set the price of homes. Not so... They've got a out of pocket budget of (for example) $1000K/month and the govt sets the interest rate which sets the amount they can borrow which sets the price of the house.

In a similar way, a school knows the median student (and family) can toss in $5K/yr outta pocket, and the govt will toss in an additional gua

This argument is naive on it's face and ignore supply and demand forces for housing.

Ah but interest rates are the Strongest force controlling house prices. Your local income rates set how much you can spend per month. Govt controlled interest rates set how much can be borrowed for that monthly payment. Those two factors control 99.999% of housing price.

(Your median resident walks in with $X downpayment) + (The govt controlled interest rate means you can borrow $Y given (the median income available for housing for the median resident))

The seller sets the price of their house based on comparables in the neighborhood plus any unique features which raise or lower their specific value.

His argument is that the seller sets the price of their house based on what the market will bear. His premise is what the market will bear is a direct function of: how much money people in your area make, and what the interest rate is.

He has a valid point. Your right about comparables and features to a point. But say your house has a market value of X. Tomorrow

Try visiting Yahoo! news or Politico or Huffington Post and explaining how guaranteed loans make college more expensive and you get flamed and accused of being a rich 1%er that only wants wealthy kids to go to college.

The problem is that not everything should be, in a reasonably just society, subject to the unmitigated forces of the market. Senator Ryan imagines families taking their medicare vouchers and shopping very carefully for the most cost-efficient medical care. It doesn't happen that way. If your grandmother arrives at the emergency room, having received CPR on the ambulance ride, you don't want to have to shop around. You want care right then - in the room that she's currently occupying.

Similarly, your daughter wants to be a geologist. But the best geology program is (I'm making this up) North Dakota State. You don't have the option of moving your family to North Dakota to score in-state tuition. You can't tell her that her best option financially is to study to become a nurse instead. Education is not a commodity that you buy by the pound or by the linear foot.

Most people understand that a higher education is their best option for improving their lot in life. It's dawned on universities that they sell something of high, but uncertain, value. They realize they can raise their prices to compensate (and some, simply to take advantage). Do you want the higher education your kids are getting to be a shell game, where some of them are guaranteed to get the value out of it that they put into it, and some of them do not?

The truth of the matter is that, over the course of the last few decades, federal and state subsidies to private and public universities, and also to academic research generally, have shrunk and shrunk. Private loans to individual students are a poor compensation for that. Even people who never have kids of their own derive some value from living in a society where higher education is valued and pursued.

One of the reasons that the best and the brightest from around the world come to America is that they perceive the value of a university education here to be high compared to elsewhere. If that becomes no longer true, there will be less motivation for talented people to come here and participate in our economy.

Similarly, your daughter wants to be a geologist. But the best geology program is (I'm making this up) North Dakota State. You don't have the option of moving your family to North Dakota to score in-state tuition

But you DO have the option of getting private grants or scholarships for particular fields of interest.

The problem with federal loans is they float ALL boats. Anyone getting a federal grant can go anywhere, so it increases how much students pay everywhere.

The problem is that not everything should be, in a reasonably just society, subject to the unmitigated forces of the market.

That's an argument for state-sponsored public education where the state both subsidizes it and sets the prices, as in some European countries. Merely pouring public money into private businesses is a horrible way to manage a social welfare program, and does not result in a just society - as TFA demonstrates.

No, not at all. If you had a full campus while charging $5K/yr, you'll raise your tuition to $65K a year, because you'll collect the "free" $60K plus your campus full of students obviously can afford $5K/yr.

Not one extra person will attend (duh, the out of pocket cost remains $5K) and not one extra person will not attend (free money for all !!!)

Well, no, you don't do it all at once. You raise by $2.4K to $7.4K/yr, and the cashier's office can heavily advertise free government money to help cover the increase. People in the middle of getting their degrees aren't going to leave their living and work situations and their friends for an increase they just have to fill out a form to basically ignore. Maybe some new students will go someplace else, but since education grants are universal, every other institution has incentive to raise rates, too. Insti

While student loans are not free money, I doubt most students realize how much money it actually is and the ramifications of taking on such a loan. Most students don't think about student debt until after they graduate.

I've met a college graduate who took on $160K in student debt to walk into the 2010 job market with a degree in Theater Management. I met him when, with tears in his eyes, he applied for a substitute teaching position that was paying $85/day. The best he could home for was 7-10 days work a month (because once you go above 10 days a month the district has to pay you $15/day more, so they limit each sub to under 10 days a month if they can)...

And there's a lag in building facilities. However, this is happening continuously, so for every university that is in a pinch to try to get enough faculty or facilities, there is always some university that just finished adding extra faculty or facilities and thus has extra capacity. It averages out (over all the schools in a region) to be elastic even if it may not appear to be when you look at a single school in isolation.

The other thing this whole thread seems to have ignored so far is that even as universities are raising tuition, they've also been cutting staff, eliminating tenure, dropping courses, increasing class sizes, and capping enrollment.

My friends who are currently doing undergrad degrees have seen core classes explode in size, just in the time they've been at their schools. Many of them have been forced to take five or six years to complete their degrees solely because their college only offers some of the classes they need to graduate every other semester, and they might be too impacted to get in.

So if student aid is what's causing tuition to go up so fast, what's causing all of this other stuff?

Well, consider the resale value of the product: how much does a degree from Alfred's College of Computers (Est'd 2011) is worth on the job market?

Yeah. I'd say that the unalterable value of prestige, certification, and reputation is a HUGE barrier to entry and guarantees that education supply can't expand by the best standard capitalist method: expansion of competition. So the only viable way is to expand facilities and staffing in current institutions (a process of years and decades) or simply overserve us

You need more instructors and more classrooms and that takes about a ten year timeframe to ramp up.

If you want to be a educational success. If you just want to set up a degree mill to collect money, that takes about six months. Evidence is two blocks from where I'm working, but there are at least 3 other recently opened degree mills in the area here.

The problems I have with that logic are that A. schools are not for-profit entities, with few exceptions, so there's no incentive to raising the price because the market will bear it, and B. the cost of running a school is for the most part roughly linear in the number of students (except that the cost per student increases when the size of the school drops below a certain threshold) because there are no scarce resources involved. Even facility upgrades (to handle more students) average out to be roughly

Larger programs, headcounts or facilities make their positions inherently more valuable when viewed from a "competitive salary" perspective, so they may get raises simply because they are administering a larger entity.

Job transfers, within the school or to another school -- you can climb the career ladder by showing that you've done a better job bringing in funding, expanding programs, etc.

That list shows the real problem. You're looking at administrative numbers. Down at the very bottom where the numbers start hitting $60K/yr, cut that in half and you're seeing what the numbers look like for professionals working non-administrative positions in Universities, from professors to IT professionals to doing all the damn paperwork that makes those Universities function. The pay scale is literally upside down. Administrators provide almost no value. The president of my tiny little local state

I think there is a subtle point you are missing. The Federal Government subsidizes a good – any good - for simplicity; let us say $100 per student. This subsidy will be split by the consumer (student) and the producer (school.) How will it be split? The article argues that the lion shares goes to the school.

First, while schools are non-profit, very few are staffed by Franciscan monks who have taken a vow of poverty. Schools are interested in upgrading their campus, doing basic research and increasing

I wonder how it'd be different if two things changed. As I see it, one of the problems with college education is that there's very little competition, so schools just take advantage of the situation and raise tuition as much as they can. It's basically a monopoly or oligopoly situation.

1) in-state vs. out-of-state tuition. The problem now is that if you're in State A, you only have probably 2 or 3 schools that you can go to to get a good education. Of course, you could go to community college or a trade

If tuition assistance evaporated, enrollment would drop. With less students coming in, would universities:

1) Cut payroll/pay/offerings significantly
2) Raise tuition to make up the difference
3) Lower tuition significantly enough to reach students who can't afford college without assistance
4) Find non tuition based forms of funding
5) Fold

I think 3 is incredibly unlikely, and the original article is a bit foolish not considering the other side of the coin. 2 Doesn't seem likely (or wise) either. That leaves 1 (which I've seen happen over and over again in the face of budget issues), 4 (which works for a few universities, but isn't sustainable for all of them) and 5.

Of all the likely results of ending college tuition assistance, the most likely involves a few private institutions thriving, and most public/private institutions massively cutting their programs and pay. More electives suffer the cost of a society that increasingly doesn't value education beyond the immediate "will this turn our kids into productive workers", and the already tight job market for professors tightens (with less pay at the end of the road).

If we want to continue having the types of colleges and universities that truly enrich our society, we need to find smarter ways to make them more accessible than cutting tuition assistance.

I think the question we have to ask ourselves is which model of university do we want. Do we want everyone to learn "general enrichment" things from a university, or do we want everyone to learn a trade and a minority to get the "general enrichment" path? We should actually the question and think about the implications of both models instead of spouting retoric about "art is good!" or "productivity is good!"

My college has doubled tuition in the decade since I graduated. All the 50 year old buildings that held my classes have been razed and replaced with state of the art brand new architecture. There are numerous new sports stadiums for teams nobody's ever heard of. They're paving the streets with marble - literally, marble. It's like they are struggling to find ways to spend all the money.

Count me in that group. I'm against all such aid on principle but if there is going to be ANY student aid it isn't unreasonable for me as one of the taxpayers being forced at gunpoint to donate to your education to insist in return that you at least use it toward something that has a reasonable chance of allowing you to a) pay off the loan and b) make you more a productive

If you're taking my tax dollars to study something that won't make you more productive, you're a leech. People who want to party for four to six years and major in something bullshit can either pay for it themselves or convince their parents (or someone else) to.

Let's look at what you said practically. "Your" tax dollars huh? Given the percentage that goes over to military spending, police, fire, libraries, infrastructure and public works, public schools, health initiatives, financial/economic initiatives, etc, only a tiny tiny amount is left for college. Of that, most aid comes in the form of student loans. So suggesting your personal tax dollars go to pay for leeches is quite misleading, since it is more like your personal tax cents.

Further, what major won't make you more productive? I studied philosophy, and now have a job as a web developer. Looking at people I've worked with, I see art history, psych, even sociology majors. A given major isn't bullshit (though some can be more than a bit funny sounding) - it comes down to how effective a given student is at taking advantage of what they chose to learn.

Most universities could stand to trim some fat. Administrative costs in higher education have mushroomed in the past few decades. For example, at the very large public university where I'm a grad student, we have an office of "diversity and community engagement." The person in charge is one of the vice presidents of the whole university. Several assistant VPs, associate VPs, executive directors, etc are also employed by the university to lead different portions of this office. Each of these people has a staff, of course. According to the organizational chart, which I'm looking at right now, they come to a total of 44 people. All to address diversity concerns, or something. I'm actually not sure what they do. It seems somewhat doubtful that the expense of employing 44 people (which must run into the millions or maybe even the tens of millions of dollars per year) is actually accomplishing much of real value.

We covered this topic a few days ago [slashdot.org] in a side rant about the cost of education expanding to absorb all available funding. Upon further digging into the scarce data on the subject I found [slashdot.org] that it does appear that many universities are shifting the total cost to the student (and thereby to Federal Student Loans).

State funding levels (for state run institutions) have remained largely the same in many cases, while university budgets have mushroomed, (mushroomed all out of proportion to enrollment, out of prop

3) States will disproportionally cut university budgets to solve statewide budget shortfalls, effectively shifting the burden of state indigence to university students (intended?).
If a state can't afford pensions for state park employees, the temptation is to plunder university budgets because students will make up the difference with their own debt. So indirectly, students are now paying for pensions of state employees, and the state stays in the black (or less in the red).

In canada for example the government (provincial) sets tuition fees for a university to be able to accept public funds. You can charge more than that, and be accredited, but you won't get public money. The Richard Ivey School of Business at Western is an example of a programme that went that route (but only for 2/4 years of undergrad and grad school or something weird, they're somehow part of western sometimes and separate from it others, but whatever).

Now the problem is that costs to run universities are increasing. Most of them are full of old buildings, so when the cost to heat or cool things goes up, they're screwed. There's just general inflationary pressure, the fact that staff need to be paid more as time goes on. As it is the technical faculty are becoming separated from industry rates and it's a real problem. A starting faculty at 70k is what a comp sci grad can get straight out of a bachelors.

If costs go up, you need to get more money. In canada at publicly funded universities you typically pay 5-7k per year, and the government chips in another 13k or so (foreign students pay the full amount). If tuition fees go up, well then student loans need to increase to compensate. It's not like students can magically live on 6 or 700 dollars a year less this year than last.

Now rightly, universities are trying to get as much money as they can. They may not run a profit, but they can't run at a loss indefinitely.

So that's one scenario, where cost increases and government approved tuition hikes to meet cost increases drive increased student loans.

In a more european system, where tuition is even less if not zero then it's entirely the government negotiating with universities on the price per student. And then you don't really have effect 2, and least not on core educational things, you might see more expensive restaurants on campus though.

The US system is a bit messier. There are enough schools that set their own tuition rates that you could see a bit of both going on. Where loans are increased in part to keep pace with public price changes, and private schools are taking advantage of that increased capital. But then loans have to be made available for students going to the expensive US schools which means the public ones can demand more money. In canada and europe if you want to go to a school with 20k tuition that isn't med school, well that's your own damn problem. In the US if you want to even go to a school like UCLA you're looking at 12k and tuition rates seem to vary much more wildly even within a state than they do elsewhere.

Without loans a lot of people wouldn't be able to go to school, but somewhat sadly, we're at the point where we're significantly over training in some areas (english, fine arts, history, drama, psychology, etc.) and giving out loans for a lot of those grads is just going to saddle them with debt for decades.

You are not intended to live on minimum wage. Anybody who shows up on time and sober will be making above minimum in three months.

Conversely anybody who can't produce at least minimum wage worth of value per hour will never ever be able to get (or keep) a job.

Good God that's poorly informed.

I mean, I don't currently have direct evidence that you're wrong in the literal sense. However, I do know that there are plenty of places where youmay not make minimum wage, but you still don't make anywhere close to enough to live on, and no matter how long you work there (doing a good job, showing up on time, etc), you have no guarantee of making more.

I have personal knowledge of a job making $8/hr at a chocolate store, where the owner is on the lookout for more adults to hire, part time, for that much money, on a long-term basis. And has no intention of raising the pay, making a full-time position, or anything of the sort.

Minimum wage in this country is a joke, and while raising it to be a living wage would, indeed, cause some short-term loss of jobs, over the longer term, as the poorest working people were measurably better off and able to spend more money, it would contribute greatly to the country's economy.

The only reason why the loss of jobs would be temporary is if inflation kicked in (which it would) and effectively lowered the minimum wage back down to a level where they would be worth hiring again. What raising the minimum wage really does is hurt the middle class by raising the cost of everything they buy without giving them any extra benefit. People who make a million dollars a year will be fine if they have to pay twice as much for a cheeseburger due to burger flippers being payed double what they are now. People who make 50k a year may not be ok. The minimum wage is a job killer on the front end and an inflator on the back end. If you really want to help poor people, a reverse income tax would be much more effective (although it has it's own set of problems).

Minimum wage in this country is a joke, and while raising it to be a living wage would, indeed, cause some short-term loss of jobs, over the longer term, as the poorest working people were measurably better off and able to spend more money, it would contribute greatly to the country's economy.

This is so misguided. You're putting morality ahead of reality.

Making the minimum wage a living wage is equivalent to saying anything you can be paid for doing, you should be able to do for a living. Now think about that. I pay kids to shovel the sidewalk for me in winter. Should an adult be able to make a living doing nothing but that all his life? The economy is full of different kinds of jobs, ranging from difficult ones which pay a lot, to easy ones which pay a little but are good working experience. If you raise the minimum wage to where it's a living wage, you're not making life easier for those in those low-end jobs, you're eliminating those jobs from existence.

The whole point of paying people for a job is that the value you get from them doing the job (the productivity they generate) exceeds what you're paying them. I pay the kid with the shovel $8/hr because I can use that hour I save to earn more than $8 (or I value the free hour I get to spend with my family more than $8). You pay the burger flipper $8/hr because by selling the burgers you can net more than $8/hr in earnings. If you can't net more than you're paying them for their labor, there is no point having them do the job. You'd lose money doing it. In other words, it would detract from the country's economy, not contribute to it.

e.g. If you raise the minimum wage to give the janitor a better living, he doesn't get a better living. The company which hired him to clean the offices once every week? It's no longer cost-effective to have him clean every week. The clean office was worth (say) $80/wk, and they were paying him $64/day to clean once a week. Now you raise his wage to $100/day. What's going to happen? It's no longer worth it to clean once a week. So they reschedule him to clean every other week. He's making more money per hour, but he (and all other janitors) are working fewer hours. They'd be the same or worse off than before, and everyone's offices are dirtier. All because you've artificially priced labor above what it's really worth.

Don't get me wrong; I completely support a minimum wage to prohibit exploitative labor wages. But people have got to shake ridiculous the notion that somehow every job is something that an adult should be able to make a living doing, and thus the minimum wage should be a living wage.

However, I do know that there are plenty of places where youmay not make minimum wage, but you still don't make anywhere close to enough to live on, and no matter how long you work there (doing a good job, showing up on time, etc), you have no guarantee of making more.

Yet, apparently, they keep showing up for work and are able to feed, clothe, and shelter themselves in some fashion. Me? I'd move to somewhere where it wasn't so expensive to live. If everyone does that then the business will have no choice but to increase wages or die. I've got no sympathy for someone in a bad situation that does nothing to change it -- especially in America where you have the freedom to do exactly that.

I have personal knowledge of a job making $8/hr at a chocolate store, where the owner is on the lookout for more adults to hire, part time, for that much money, on a long-term basis. And has no intention of raising the pay, making a full-time position, or anything of the sort.

Then the owner can pound sand. Oh, it's the best job offer on the market? Well, maybe you should take it then? Or move. Or start a competing business. Etc.

Pretend I'm typing this in all caps and I'm using lots of exclamation points: You cannot have a living minimum wage. And definitely not in a global economy.

Let's go extreme. Let's raise the minimum wage to $1,000,000/hr. Hell we'd all be living in mansions and driving Bentley's right? No? Why?? Well guess what, those same problems exist (albeit on a smaller scale) even when you bump the minimum wage from $7.25 to only $7.50. There is a short term bump and then inflation and job losses bring everything back into balance. Meanwhile you've just lowered the value of everyone's cash savings. So, in the long run, you've manged to do nothing for the working class and you've reduced the net worth of the middle class and probably screwed over most retirees. Hooray! The rich are OK (of course) since they have their money tied into investments that appreciate with inflation.

I'd love to see America try a free market once -- just once. No more minimum wage. No more corporate welfare or subsidies. No more laws and loopholes for the rich and entrenched interests. A flat tax system. Etc.

In other parts of the world, being rich sucks a whole lot more then it does in the West. Because when there's a shitload of poor people with no prospects for a future, kidnapping a moneybag, aka rich person or his relative becomes a very attractive proposition.

But yeah, let's draw direct comparisons to places that have fundamental differences AND let you live off much less because everything also costs a whole lot less... Yeah. Stupid.

lol, so everyone magically makes more (providing they are sober?) than minimum wage in three months huh? So all those people forced to live on minimum wage where I live because companies no longer pay raises (going on four years now) are supposed to have magically gotten raises right? I mean they are generally sober (certainly at work, not so much outside it for some) and so they get this automagically correct?

I live in Huntsville, Alabama which is a smallish city (~180k pop) surrounded by a couple of semi-affluent suburbs. Surrounding the suburbs are a very poor rural area dotted with small towns. The area (as well as most of the state, and most of the region) has an extremely low cost of living. Minimum wage is at the Federal minimum of 7.25.

I have two brothers and a sister who all live here and make at or near minimum wage at various jobs. They have occasional raises that seem to add up to around $1.00 per hour each year or so.

Working full-time at minimum wage you end up with a take-home of less than $1000 per month. The cheapest 1bdrm apt you can really hope for is around $350/mo. (You can potentially save some money here by playing the roommate lottery.) Utilities will bottom out at around $50/mo on average if you are careful. The area is very spread out and not pedestrian friendly, and we have very poor public transportation here. Gas is around $3.10/gallon right now (it recently dropped from around $3.70 or so, where it had been holding for a couple of months) so depending on the commute you'll be spending somewhere in the ballpark of $100/mo or so on gas.

So, after gas and housing you're looking at $500 to live off of each month. This is just barely manageable from my experience. Frugality is a must in this situation, and medical bills are basically un-payable. Since most retail and other min-wage jobs are only part-time, lots of people end up working multiple jobs to make ends meet. Luckily this area was not hit as hard by the recent economic unpleasantness, so there are still lots of low-end jobs to go around. Anyone who has student loans, car payments, or any other significant bills is pretty much on rice-and-beans-with-the-lights-out at this income level.

The thing about those jobs that never pay more than minimum wage is that you should not stay in them long term. They are jobs that can pretty much be done by anybody that has a pulse and can stand upright (the second part not always necessary). The only exception to the above are jobs that people do because they love them. If a job requires actual skills and your value to the employer increases the longer you hold the job and the employer only ever pays minimum wage, they will not stay in business very long

You would have to stay pretty lucky to live on minimum wage for 2 years. For example, I have type 1 diabetes. Without insurance (which I probably could not afford), my medication would be about $800 per month. If there was one day I could not afford it, I could be in a coma. It has nothing to do with lifestyle and comes on without warning. Long story short, shit happens and it is pretty gd scary on minimum wage. That is not even considering the fact that many people on minimum wage have kids as well, each w

I would not calling living on minimum wage in the US as surviving, at least in major cities. Take for example Chicago, since I am most familiar with it. For simplicity, lets assume you work 4*40 hrs/ month. this equates to 160 / month. Minimum wage in Illinois is $8.25/hr (which is more than the national minimum btw). this is a net of $1320/month. Looks good, but Illinois now take 5% leaving $1254. The feds will take 15%, leaving $1056. I don't know the exact rates for Medicare and SS, but lets assume that it will put you under $1k.

So you pretty much need a place to live. The rent for a studio apartment, assuming you don't get a roommate, is going to run about $600 - $700/month leaves you with about $300-$400/ month. Transportation is going to be about another $100/month for a monthly CTA pass. Taking you down to $200-$300 month. Oh, you want to eat too? ~$200/month (granted, you probably qualify for food stamps, but you still need to pay some money out of pocket). An viola, you are out of money. I didn't even mention utilities or other living expenses.

tl;dr version:
Living on minimum wage is hardly a living wage. It is hardly enough to cover the bare necessities in the US. Most likely you will need to get a second job to make ends meet.

Yes, being poor sucks, been there and done that too and didn't get the t-shirt because I couldn't afford it. But you can survive.

Have you been poor enough that members of your family take turns skipping meals because there's not enough for everyone? Have you been poor enough that you have had to drink water from streams or ponds around your house because the 'city water' got turned off? Not being able to afford new Nikes does not equal poverty.

Anybody worth a damn won't be making minimum long.

This implies that there are an infinite number of jobs in every area of the country for all workers. This is not the case. As hard as it is to believe, some people still harbor prejudice agains

I don't get why the government give aid to all majors indiscriminately. If they are going to be giving out students aid with our tax dollars, they should at least give out aid based on projected job demand. By doing so, they are reducing the number of students who graduate with no job prospects while encouraging students to fill market needs. It might also be wise to offer aid based on personality tests in order to encourage students to go into a field where they are most likely going to be useful and hopef

Since the feds made student loans not eligible for inclusion in bankruptcy and the rates went up several points past the mortgage rate, I would guess that money is going to chase student loans in the future. Guaranteed payback at more than Tbills, more than the stock market average. The easy tuition loans in the future may not come from signing that Plus Loan with the government, they may come from signing that Usury Loan from the big financial houses.

First, universities, unlike the taxpayers, suffer no financial consequences when the underqualified students they have lured into their academic programs ultimately default on their loans.

"lured"? Kind of showing their bias, aren't they?

Second, students who study six years but ultimately drop out receive more financial aid than the diligent "A" student graduating in three years: We reward mediocrity and punish excellence.

How is getting something done in half the time a punishment?

Again, there's quite a bit of bias showing in that article.

Third, there is no adjustment of student-loan interest-rate terms to meet market conditions or differing risk factors relating to individual repayment prospects.

So they're pushing for different interest rates depending upon your major?

Fuck that! How about some GRANTS for people in the hard sciences?

Fourth, the Free Application for Federal Student Aid form, associated with these programs, aside from being unbearably complex, gives colleges private information about family finances that allows them to gouge students more.

Stick to a single point in each point, okay? Either they're "unbearably complex" or they give too much information about family finances.

Fifth, colleges' tuition and fee policies drive the amount of loan volume, rather than the other way around, thus contributing to the college-cost explosion and the subsequent academic arms race.

What "academic arms race"?

TFA needs an editor who is not looking to grind the same ax as the author.

That's all there is to say. The banks will loan pretty much anything because they know that the debt is nonchargeable (with very rare exception), the schools know this too so they just keep raising tuition and the banks keep loaning more money. If school loans were allowed to be discharged like any other debt you would see the whole show come crumbling down like (probably more so than) the housing bubble. Tuition assistance is pretty much just the "gateway drug" of school loan debt.

Isn't the whole point of the aid to allow them to go to better schools than they could otherwise afford? It's not as if low income people would be able to afford MIT today without aid had the Pell Grants been cut in the 80s anyway.

Increased availability of aid and loans may very well create some tuition inflation, but I seriously doubt it is the major driving factor at public universities. It took me a while to graduate since I got called up to active duty for a while, but the tuition at the in-state public land grant university I attended nearly doubled between when I entered as a freshman and when I graduated. In 2003, tuition and fees was about 2200 USD/semester, but had ballooned to just over 4000 USD/Semester in Spring 2011. As far as I am aware, there hasn't been massive increases in the availability of aid or loans in that span (in fact, I'd argue generous private loans have become LESS available since 2008). What HAS happened is massive state budget short-falls due to economic downturns and short-sighted tax cuts. When the state is short on cash, higher education funding seems to always take the brunt of the damage in budget cuts, so public universities make up the difference by hiking tuition and/or recruiting out-of-state students.

Given the fact that federal funding for college has steadily declined the last 30 years, state funding even more, and college tuition has continued to rise by leaps and bounds, would clearly demonstrate that no federal funding does not increase tuition.

Is it federal funding when the federal government backs nominally privately offered student loans? By, for instance, not allowing most bankruptcies to include them? There are a lot of steps the federal government takes to relieve private banks of the risk that would otherwise be incurred. They turn nominally private loans into a lucrative rent system.

> Increased availability of aid and loans may very well create some tuition inflation....> When the state is short on cash, higher education funding seems to always> take the brunt of the damage in budget cuts, so public universities make up> the difference by hiking tuition and/or recruiting out-of-state students.

Interesting you don't see the connect there. In-state rates ARE student aid. Just because it isn't a line item on your invoice doesn't make it less so. And as long as the taxes are

Us stingy non-compassionate curmudgeonly types not swayed by cries that everyone must be educated or accusations of elitism have been saying this for a very long time.

The combined un and under employment rate for recent grads is now 54%... I have personal knowledge of waitresses, sales clerks, and walmart shelf stockers with degrees, and I fail to see why I should want to pay for their degree out of my taxes. I get a benefit from the masters degree my kids teacher has, or my doc and dentists degree. Or the civil engineer who designed the freeway overpass I drove over on the way to work to pay for all these degrees. My bachelors degree waitress? Eh not seeing the poin

The Department of Education doesn't seem interested in the solution to this - which would be to standardize the information taught in core curriculum in college-level courses. Accreditation was supposed to convey a certain level of performance and standards - but given the rampant creation of 'accredited bodies' to which every college can make their own and become a member of; it didn't go far enough. To a certain extent, a standard cost break-down of what core courses should cost based on what materials

This applies to many programs of this type. Back when I lived in Minnesota there was a big todo over welfare moms having more children simply to get an increase in welfare aid. Same same same. The programs intentions were good, but the outcome was not. And if you make this argument you are called a cold-hearted bastard. Well I guess I am a cold-hearted bastard, and all such programs should be eliminated. Flame suit on.

Back when I lived in Minnesota there was a big todo over welfare moms having more children simply to get an increase in welfare aid.

Which is almost certainly a complete fabrication on the part of conservatives. State aid is never enough to pay for all the costs a child incurs. Did they have any actual data on how often they claim this occurs? Or did they just make something up (in the grand tradition of Ronald Reagan [huppi.com]), and harp on it until people thought it was a real problem?

Usually when I say stuff like this I try to keep it apolitical, but it's really gotten out of hand - republicans vilify every single thing that the government does nowadays (except the military, and state secrets, and domestic spying). Yes, Bloomberg is a republican politician (even if he's officially independent like Lieberman), and the WSJ is a republican mouthpiece just like every other Murdoch rag. I'll stop there, I don't want this to turn into some long rant, but come on: you can't use some twisted logic to turn lowering taxes into the solution for everything.

No the difference is not filled by loans, only grants and scholarships. That's the point - the college advertises a very high price and then charges a more reasonable one by using discounts in the form of grants and scholarships. This gives the college leverage in what students it can recruit and makes it look better because people associate high sticker price with quality. Pushing this strategy is fairly new and that is why tuition has gone up so much, not because of student loans.

This article [salon.com] talks about for-profit Corinthian Colleges soaking up federal dollars while many of their students drop out and default. Pretty interesting when considering whether the federal dollars are really helping students.

Why is it the market? Because we say it's the market! Don't bother investigating or ask colleges why they raised tuitions! Just assume it's the market! MARKET! The link in the OP is, predictably, an opinion piece and not any sort of survey or discussion with actual educators.

This link [usnews.com] leads to a study by a nonprofit group that had some different answers:

The main reason tuition has been rising faster than college costs is that colleges had to make up for reductions in the per-student subsidy state taxpayers sent colleges. In 2006, the last year for which Wellman had data, state taxpayers sent $7,078 per student to the big public research universities. That's $1,270 less (after accounting for inflation) than they sent in 2002.

Public universities have been reining in overall spending per student in recent years. Flagship public universities' spending per student has risen from about $12,400 in 1995 to $13,800 in 2006 after accounting for inflation. But since 2002, spending at public colleges has generally not exceeded inflation.

Increases in spending were driven mostly by higher administration, maintenance, and student services costs. Public universities spent almost $4,000 per student per year on administration, support, and maintenance in 2006, up more than 13 percent, in real terms over 1995. And they spent another $1,200 a year on services such as counseling, which was up 23 percent. Meanwhile, they spent about $8,700 a year on classroom instruction for each student, up about 9 percent.

Big private universities, powered by tuition and endowment increases, have increased spending dramatically while public schools have languished. Total educational spending per student at private research universities has jumped by almost 10 percent since 2002 to more than $33,000. During that same period, public university total spending was comparatively flat and totaled less than $14,000 a year.

Maybe they rise over time anyway due to inflation and not inflating student aid reduces the amount of rise? Maybe they rise more like healthcare? Maybe there are a combination of factors that describe tuition and one of those inputs is student aid?

Or are you saying that Bill O'Reilly is so stupid as to say that when the data doesn't fit the simplest possible model then whatever that model predicts must be wrong even of other, more complex models, can come to the same conclusion?

See the housing bubble, where multi-generational low interest rates lead to multi-generational high house prices despite real median family income declining and median family non-housing expenses increasing.

Lol, as someone who has actually been told they can't finish their degree program because they cannot currently be loaned any more money (and so having gone 3.5 years and been in my senior year when told this)... I can tell you that their is no such thing as " ALL of their students have access to ANY AMOUNT of money". Their are caps and god forbid you ever hit one. It gave me a massive detour in life and now a decade later I'm still working on fixing it.... By having to go to college again. Which I can do o